PRIMARY PRODUCE

Wanganui Chronicle, Volume 79, Issue 196, 22 August 1935, Page 8

PRIMARY PRODUCE

BRITISH MARKET MR. COATES’ INQUIRIES LONDON NEGOTIATIONS PROPOSED EMPIRE MEAT COUNCIL { Per Press Association. I WELLINGTON, Aug. 21. A civic welcome home to tee Prime Minister, lion. G. W. Forbes, and the Minister of Finance, Hon. J. C Coates, was extended by the city o r 'Vellim'* ton in the Town Hall to-n’ght x the Mayor, Mr T. C. A. Hislop, taking the opportunity on the behalf of the citizens to express good wishes to the Ministers. Messrs Forbes and Coates, replying to the welcome, surveyed the outcome of their miss on. A noisy minority “ welcomed” Messrs Forbes and Coates when they addressed an audience that in the main was friendly. A Communist element was present in force and a number of interjectors were removed by the nolice, although Mr Coates, when he could r»e heard, prevented other ejection* bv an appeal to the police to leave the interrupters alone. Mr Forbes’ opening was lost in booing and shouting from the bark of the hall, the main demand being for an explanation why he, in a speech in Canada, had comm’tted New Zealand to war in the event of England’s participation. Mr Forbes eventually was allowed to explain that what he had said was that before New Zealand would go to war in association with England, the New Zealand Parliament would have to be called together. The explanation did not satisfy the Lavk of the hall, pandemonium re-gn-ing for several minutes. After returning thanks for the welcome extended the Prime Minister and himself, Mr. Coates said that the recent discussions had further cemented Imperial relations, and the United Kingdom Government, in formulating their agricultural and import policies, would know’ the trend of developments in New Zealand and make full allowance for them. “For our part we have gained a surer, more intimate, and personal knowledge of the great changes now taking place in the United Kingdom,” said Mr. Coates. First dealing with the conversion loan, Mr. Coates said: “The conversion arrangements illustrated the high esteem in which New Zealand is held abroad. They indicate too that New Zealand is regarded as one of the most economically sound countries in the world. The conversion loan recently negotiated was £10,135,800 of 5 per cent stock maturing in 1945, but the Government had an optional maturityclause whereby the stock could be redeemed or converted to a different rate of interest after July 1935. Although there was no need to pay off any of the loan, there being ample funds available in London for conversion, we decided to obtain the lowest possible rate • of interest. It was deemed to be wise to jneet £2,135,000 of the loan by cash payment, and to convert the remaining €8,000,000. The result was the conversion at 9SJ to 3 pei cent, maturing 1935, but with an optional maturity date safeguard. The yield to investors worked out at a record low rate of £3 Os lOd. With all expenses included, the annual cost to the Government is £3 2s Id per cent. We feel we could not have gauged the feeling of the London market better. The stock rose by a quarter to 98£ and has remained there. The transaction, as a whole, may be regarded as highly satisfactory in that not only have we reduced overseas indebtedness, but have refinanced on much easier terms, thus lightening the burden of our annual interest charges. Fixed Charges. / “We should always remember that the greatest difficulty we had to face during the worst of the depression was the fixed burden of overseas debt. This meant when prices fell we had to send more produce away to meet the debt service. “Another feature worth noting is the long period (20 years) for which we have secured the low rate of 3 per cent. This should be remembered when comparing the financial arrangements made by other countries. Australia recently converted a small part of her overseas debt at par for 3 per cent., but this was for 4 to 6 years—a very short period. For investors to lend tor 20 years at 3 per cent, as with our recent conversion, indicates that New Zealand's credit position is sounder than it has ever been.” Mutton and Lamb. Mr. Coates referred to the British Government's desire to protect the British farmers, and said that New Zealand’s best policy was to co-oper-ate with the United Kingdom Government so that any scheme evolved for protecting the British producer would, as far as was humanly possible, also be in the best interests of the New Zealand producer. New Zealand had secured an agreement that no levy or tax would be placed by the United Kingdom on imports of New Zealand mutton and Jamb. In addition, the principle of regulated marketing was retained, - that from both points of view—prices and quantities—the mutton and lamb agreement was eminently satisfactory. Dealing with the general outlook in Britain, Mr. Coates referred to the activity in many important lines of British industry. “While tiie north is comparatively depressed, there has bee a shift in British indu .iy to the south. Light industries are. springing up within easy distance of London and ou a scale which suggests planned development. Industrial, transport and town-planning authorities are working together, and ove* a great part of England new factories are to be seen. Buildings are going up, villages are growing into towns, and housing is being tackled on a national scale, '.there has been a spurt in new investment and :• significant decrease in the numbers of those unemployed. England is in better shape than before the world depression. Confidence and industrial activity have returned. Unfinished Meat Agreement. Mr. Coates then referred tu the unfinished meat agreement. He said that

in publiclv discussing the beef position as the delegates loft it. one who took part in the detailed discussions had the advantage of inside information, but for the moment that was a disadvantage, for the reason that finality had not been reached and many matters could not be disclosed. It might, however, be said that as far as New Zealand was concerned they had reached a point before he left where a satisfactory settlement had been arrived at. All outstanding matters of difference between themselves and the other parties to the discussions and the differences were considerable enough at the early stages of the negotiations —had been cleared away. The settlement arrived at was acceptable to the New Zealand Cabinet and to the Meat Producers Board on behalf of the producers, but th e other Governments, some within and some beyond the Empire Governments, which had treaty rights in th’.s connection, had yet to define their attitude. One point that had general recognition was that if the producers were to be saved from ruin there must be an intelligent regulation or supplies coming on to the market. There /must be a collective effort. If the farmers insisted on remaining in cut-throat competition they would suffer. The next plain fact that had to be faced was that the United Kingdom Government were not prepared on their own undivided responsibility to regulate supplies coining on to their market. They had found that was a task, however necessary it might be in the interests of producers generally, to which considerable odium and difficulty at tached. The plainest lesson from experience was that a tariff would not solve the present problems, even if it had been driven back on to the ne cssity for a system of regulat.ng supp.ies. Hence arose the suggestion of settingup an Empire Meat Council which would have extensive responsibility in relation to market supplies. In addition to the Empire Meat Council it might be found necessary and expedient to have another inclusive authority which would embrace representatives of all supplying countries. To this conference the United Kin'/om would call all who were substantially concerned with their meat market in the United Kingdom. It would be an advisory and recommending body acquainting the Governments of the facts and t-he outlook for the various types of meat. An obviously indispensable part of any plan along the lines sketched was that within each producing country the producers themselves should be elfectivcly organised. Theire representatives would be directly linked with .the Empire Meat Council and with any other body of the kind. In the light of that, it wa s a matter for congratulation that iu New Zealand they had an organisation, the Meat Producers’ Board already at hand and functioning. The organisations that are in mind would have as their main task that of setting out the facts of the outlook and of recommending to the Governments. The final responsibility would necessarily rest with the Governments, but short of taking ultimate responsibility the Meat Council could undoubtedly build around itself a useful set of functions. Levy Proposal. There had been a good deal of talk of imposing a levy on imports of agricltural produce in order that the Uu.ced Kingdom producer might be assisted. Nothing was to be said about that because nothing had been decided. “But we have made it clear,” said Mr. Coates, “that if there is to be a levy—and this would inevitably fall in part at least on th e producers in the countries of supply—we cannot be altogether indifferent to the purposes for which it would be used. If it were earmarked solely for subsidising competitors of our producers regardless of their efficiency, it would be more objectionable. If in part at any rate it could be used for taking surpluses off the market and for distributing them to people who would otherwise be going short, it would to that extent be less objectionable. That is the view we have pressed.” The ask of increasing consumption, especially among the poorer sections ot the community, had to be watched, continued Mr. Coates. “That problem was an important one at the discussions in London, and there is every prospect that definite steps wi.l be taken to increase the consumption of foodstuffs. The low consumption of butter and meat products among the wage earners and others of low incomes, as well as the importance of the price factor, was shown by recent inquiries in Britain. The inquiry showed that 4,500,000 of the population with ar. income of 4s a week per head spend lOd per week per head on meat and 2d on butter. Nine millions, with an income of 5s 9d per head a week spend 17d per head per week on meat and 4.2 pence on butter. Nine millions with an income of 8s per head per week spend 24.5 d on meat and 5.9 d on butter. Nine millions with an income of 10s per head per week spend 28d on meat and 7.1 d on butter. Seventy per cent, of the people were covered in the investigation, or say 31.000,000 out of a population of 45,000,000 spend on an average 21d per week on meat and 5.2 d on butter. On the other hand, those with incomes over 14s per head, or about 4,000,000 people, spend old on meat per week and 10.2 d on butter.” Naturally it was to New Zealand's interest to co-operate in any endeavours to increase consumption, and the Government would give sympathetic support to any practicable methods for increasing consumption in New Zealand. Other Inquries. Many other questions of importance to New Zealand had received attention. Careful inquiries were made into housing policies, health insurance and pension schemes. In addition discussions were held with representatives of Belgium, India, Germany, Russia, South Africa and Sweden, and these would be dealt with in detail at a later date.